Online Exclusives

Late last year, longtime Golf Business contributor David Gould took a deep dive into the when and how of exiting a golf course investment. Now, in this exclusive podcast available to NGCOA members, Gould takes a further look into the issue with Editor-in-Chief Chris Cox and the findings he unearthed during the writing process.

Shifting Sands

With four 18-hole courses, three clubhouses, an instructional facility and an 18-hole putting course, Sandestin Golf & Beach Resort in Destin, Florida, is a major player in the southeastern golf market. Rick Hileman has been director of golf there for 10 years now; to keep all of that product both in fine working order and bustling with demand, “we have a one-year plan, a three-year plan, a five-year plan and a 10-year plan,” he says.
Even so, the golf gods have had plans of their own for Sandestin—all of which Hileman knows he simply must roll with as he tends to the short-term and long-term fortunes of his facility.

For instance, local developer Tom Becnel purchased Sandestin from Intrawest a little more than seven years ago, after the property spent two years on the market without any capital investment.

Around the same time, however, the Florida panhandle was becoming more popular among families and retirees from Ohio, Kentucky, Indiana, Tennessee, Alabama and even Texas, offering hope that Becnel’s gradual infrastructure investments would eventually bring a solid return.

But with a marketing budget that’s about half of what it was when he first arrived, Hileman must find effective, yet efficient ways to get Sandestin’s message out.
Over the past three years, another challenge has arisen for Hileman’s team: Package play at Sandestin—mostly February through April and September through November—has decreased more than 6 percent.

“In 2006 and 2007 we hosted a PGA Champions Tour event on our Robert Trent Jones Jr.-designed Raven course, so we could hang our marketing hat on that for several years,” Hileman notes. “But after a while, the effect wears off and you have to draw on a different appeal.” Free same-day replay and a daily beverage-cart credit are the most recent components to be added, with positive effect.

Then, in mid-2017, Sandestin endured untimely stretches of weather-related difficulty. “First came the wettest June on record, then the August and September hurricanes that made landfall in Florida and Texas really hurt us too,” Hileman adds. “Between the statewide travel bans and the fact that people across the whole region had to deal with cleaning up their homes, our business got hit hard in typically strong times of year.”

With 1,250 guest units of various sizes and 65,000 square feet of meeting space, plus a nearby Hilton resort with 602 rooms and 40,000 square feet of meeting space, “Sandestin’s golf undoubtedly caters primarily to resort guests,” Hileman says. “Our mix of room-nights is 50 percent group and 50 percent transient.” And though June and July are especially popular for association meetings, “we don’t see them taking time to play 18 holes nearly as much anymore. So we’ve gotten more creative by offering them a nine-hole group outing or by getting individual attendees to take two hours to play nine on their own.” Additionally, Hileman is looking to leverage the putting course for more group social events that include catered food and beverage.

Another behavioral shift has happened, this one among vacationing families. “Dad is not playing three times in a week like before,” Hileman says. “There’s so much for the whole family to do here—beach, pools, tennis, biking—that it takes a toll on golf demand.”

In response, Sandestin has focused on the college-tournament market to replenish its vacation-play segment over the long term. Each fall, the property hosts the GolfWeek Invitational for 18 men’s and women’s teams; each April, it hosts the Sun Belt Conference Championship for men, and does so for women every other year. And in 2013, Sandestin hosted the NCAA Division III National Championship. “Collegiate golfers don’t attend these events alone,” Hileman notes. “We’re seeing lots of family business for those, and that exposure generates residual business for years afterward. People get comfortable here and want to return.”

Hileman is trying to build that same sentiment in another customer segment: He’s intent on growing membership numbers and satisfaction among extended-stay resort guests and second-home owners. “We’ve become a snowbird and retirement community to a larger extent in recent years, and membership has gone up strongly because of it. But that also means higher-than-average annual turnover that we must account for as well,” Hileman notes. One big factor in member growth is robust home and condo development in the area, some of which is inside Sandestin’s gates as part of the infrastructure dollars that Tom Becnel is investing in the resort.

And while the upgrades set to happen over the next 18 months include a greatly-expanded clubhouse bar and restaurant plus refurbished meeting space, spa and golf shop, Hileman also focuses on service-training initiatives to complete the guest experience and keep people coming back. “The training is neverending—it’s an everyday focus on treating the customer as if we are welcoming them into our home,” he says.

One advantage for Sandestin: “We have a lot of staff who have been here more than five years; some people in the shop have been here at least 15 years and a few maintenance guys have been here 30 years,” Hileman adds. “So even guests who haven’t been here for a few years will see faces they recognize and feel comfortable. We’re striving for a private-club experience not just for golf, but across the resort. And while we are always going to cater to the resort market, members tell us they feel important and valued—two elements we emphasize every day to our staff.”

The three-year plan calls for irrigation and bunker upgrades for the Links course, the original Sandestin track built in 1973 and still the busiest one. “It’s got eight holes along the coast, and the layout is always rated highly in our region,” Hileman notes. “But it’s showing its age and has to wait a little while longer to get what it needs,” which further motivates Hileman to ensure that players enjoy personalized, memorable customer service.

Overall, Hileman subscribes to the idea that “we have to be creative in the approach we take towards each type of customer. We strive to please our older clientele, but the golf carts with USB and power ports are for younger players to listen to their music and use their technology as they play. We’re also marketing to them in the ways they prefer. More and more each year, it’s about the next generation.”

Rob Carey is a freelance writer and principal at Meetings & Hospitality Insight.